This innovation revolution is powered in part by traditional
methods of funding human capital development in areas such as
development and growth of infrastructure, education, science and
technology, as well as increasing access to digital, mobile, and
wireless technology.

By targeting investment into human capital development and
implementing innovative policies to shape the life sciences sector,
Africa is well positioned to realise its innovation potential.

Gowling WLG's experts look at some of the innovation
practices driving development of the healthcare and pharmaceutical
sector in Sub-Saharan Africa.

The wisdom of convention

The conventional wisdom is that innovative potential is linked
to research and development (R&D) funding. In 2013, the UNESCO
Institute for Statistics (UIS) reported that
global spending on R&D had reached a record high of
approximately US$ 1.7 trillion with many countries committed to
increasing both public and private sector R&D spending by
2030.

In 2007, the African Union sought a commitment from its members
to invest at least 1% of their GDP into R&D for "an
innovation-led knowledge-based economy" by 2020.

By 2013, countries such as Malawi, Uganda and South Africa were
reported to be contributing approximately 1% of national GDP into
their national research programmes. In 2016, the Global Innovation
Index reported that Kenya, Rwanda, Uganda, to name but a few
countries, were granted the status of "innovation
achievers" on the basis of having achieved "at least 10%
higher than their peers for their level of GDP" invested in
the knowledge and technology sectors in four out of the last five
years. Indeed, from the 17 global economies identified as
"innovation achievers", more than half the countries
recognised were from Sub-Saharan Africa.

While increasing R&D investment is a benefit, to capitalise
on the products of such R&D investment requires expertise,
familiarity with technology, capacity and the infrastructure in
which to do so. It is therefore no surprise that these
"innovation achiever" countries are some of the largest
recipients of government expenditure on education per pupil in
Sub-Saharan Africa. But beyond that, these countries have also
implemented innovative policies to shape the development of their
national healthcare and life science sectors to better exploit the
benefits of their knowledge-based economies.

Innovative plan for life sciences in Africa

The East African Community of countries has been an early
adopter of innovative policies such as the African Union's
Pharmaceutical Manufacturing Plan for Africa (PMPA)
and the New Partnership for Africa's Development (NEPAD)
initiative, titled Strengthening Pharmaceutical Innovation
in Africa. The latter proposes a framework by which the
development of pharmaceutical innovation in Africa is dependent on
establishing the following:

political stability;

an infrastructure of roads, power and water supply; and

a functioning banking and economic sector.

In addition to the above requirements, pharmaceutical innovation
is dependent on decision makers buying into the initiative and
staying committed to a process of innovation that requires social,
academic, legislative, economic and political engagement over
several years and potentially across multiple governments.

Kenya, an early adopter of investment in the tech and health
sectors, has seen an increase in opportunities resulting from
increased R&D funding. Between 2007 and 2010, the information
communications technology sector (ICT)
witnessed rapid growth in Kenya, resulting in the phrase
'silicon savannah' being coined to describe the
concentration of established, and start-up, tech companies
clustered around Nairobi, Kenya.

Successful start-ups include businesses such as M-Pesa: an
'alternative' virtual currency - which allows individuals
to purchase the virtual currency with real money and exchange
currency back and forth by sms messaging - has been adopted for the
purchase of health insurance. Whereas the traditional means of
purchasing health insurance requires a bank and a personal account,
now, individuals are able to bypass banks and bank accounts and
instead purchase insurance premiums by digital currency.

One key driver of such innovation has been the availability and
uptake of mobile telephony and internet access. Sub-Saharan Africa
has a population of approximately 800 million people, of which,
60%, or 480 million people, have access to mobile phones.

Modern technological innovation also has its place in dealing
with healthcare issues in the present. UNICEF and the Government of
Malawi recently launched Africa's first drone air corridor to
test the humanitarian use of drone vehicles for:

generating aerial imagery during humanitarian crises;

using drones to extend the scope of coverage for Wi-Fi
connectivity during emergencies; and

delivery of low weight emergency medical supplies, vaccines
etc.

This initiative has created significant interest in a number of
companies, universities and NGOs around the world and could prove
to be a useful tool to dramatically improve disaster management and
humanitarian crisis handling, globally. The air corridor tests will
run through until 2018.

Added value

Between 2010 and 2015, during the years following the financial
crisis, the World Economic Forum reported that the African economy
was out-performing the world average. Further, the International
Monetary Fund predicted that by 2020, the African continent would
be the second fastest growing economy.

The message is clear; Africa is investing in its future. By
targeting investment in healthcare, pharmaceutical innovation and
R&D, in addition to supporting private sector investment
through PPP
structures and innovative political policies, Africa's
innovation landscape, driven by investment in its people, is set to
change dramatically.

Gowling WLG is well-placed to offer expertise and advice in
order to provide added value to new entrants, SMEs or
multinationals. Our global sector-focussed approach, regional
expertise, experience and know-how allows for multi-jurisdictional
and commercial expertise in a range of different sectors including
healthcare, life sciences, tech, financial, natural resources and
projects & infrastructure.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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